OnLive To Kill Off The Gaming Console…

by Jason Wilk on March 24, 2009

Steve Perlman’s new OnLive company, has developed a data compression technology and an accompanying online game service that allows game computation to be done in distant servers, rather than on game consoles or high-end computers. What does this mean? Instead of buying games at stores, gamers could play them live via their internet connection on a multitude of devices. No need for a Xbox or Playstation.

“This is video gaming on demand, where we deliver the games as a service, not something on a disk or in hardware,” Perlman said. “Hardware is no longer the defining factor of the game experience.”

Many of the major game publishers (Electronic Arts, THQ, Take-Two Interactive, Codemasters, Eidos, Atari, Warner Bros., Epic Games and Ubisoft) are backing the idea, favoring the possibilities of higher margins, easier distribution and fewer middle-men. The idea behind the technology is to compute game data in a very powerful Internet server, which then sends the results to be displayed in the home. This could be a potentially fatal shakeup for Microsoft and Sony who have considerable market share in the $46 billion worldwide gaming industry.

With OnLive, players can join each other in the same multiplayer game, regardless of whether they have a PC, Mac or OnLive’s own micro-console (a simple box with minimal processing power) connected to a TV. Such cross-platform game play isn’t possible at the moment between players using SOny or Microsoft consoles.

Nintendo is the one who is worried the least about it. Instead of competing in the graphics game for the past 5 years, developing core motion technologies into the controller and console has been their main focus. This will buy them a slightly higher barrier to be taken out by something like OnLive. Investors need not get too worried yet. Services like this have been hyped in the past to be the next greatest thing, but bandwidth and outsources server speeds have always been problematic.